After the collapse of the Bretton Woods system, the world began to adopt the "paper currency standard". Paper money standard, also known as "free standard". A monetary system in which paper money issued by the state is used as the base currency. It is characterized by the fact that the state does not prescribe the gold content of paper money, nor allow the exchange of paper money and gold (silver). As the main currency, paper money can be circulated and has unlimited legal compensation capacity.

Since the issue of banknotes is the privilege of the state, after the nationalization of the central bank, the State entrusts the central bank to issue banknotes. The central bank issues paper money through credit procedures, so paper money is actually a kind of credit currency. In other words, money is directly linked to the national credit.

Although the status and circulation of currency can be regulated by the state, the actual value represented by currency is not imposed by law. Therefore, the abuse of power, multiple currency and excessive expansion of credit on this basis will inevitably result in the fall of value represented by currency, the rise of price level and the formation of inflation.

These banknotes are limited to domestic circulation, but they cannot be used for international transactions. Other countries will not foolishly change their commodities into paper that is not under their control, unless they directly use gold. If we want to buy other countries' goods, we must convert our own currency into other countries' currency according to the international exchange rate.

In order to ensure the US dollar's position as a global reserve currency again, the US government must work out a new agreement so that other countries have enough reasons to hold and use the US dollar.

What sustains the value of the dollar again? That's super force. It's high technology. It's oil. From 1972 to 1974, the United States government and the Saudi government reached a series of agreements. This series of agreements created the oil dollar system.

The United States uses its leadership within OPEC to ensure that all Saudi Crude Oil transactions are settled in US dollars. Crude oil is the most traded and strategic commodity in the world. The use of US dollars to settle crude oil transactions is an irresistible reason for foreign governments to hold a large amount of US dollar reserves.

At this time, the dollar is just a middleman in the whole transaction process, and it has no connection with American products and services. And the United States will have the privilege of buying imported goods, including oil, without using foreign exchange.

In contrast, the United States uses its own printed dollars.

It can be seen that the oil dollar system has brought great benefits to the United States, enabling the United States to live beyond its means for decades.

Through the export of goods to the United States in exchange for us dollar foreign exchange, China calls it "foreign exchange earning". Holding a large amount of US dollars and unable to change into the American goods we need in time, because it can't buy the high-tech and high-tech products we need most, so it stays in the United States through investment, most of which is to buy US Treasury bonds.

Therefore, restricted by the narrow channels of foreign exchange spending, they are basically dead money.

Commodities are exported for foreign exchange, and money is printed to the people at home. The domestic money supply increases, diluting the value of the money they hold. That is to say, there are still so many domestic goods, but people have more money in their hands, which explains how people have become "rich".